Tuesday, July 26, 2005

Lessons from The Prince

I've been reading Machiavelli's The Prince while I sit on a large cash position and accumulate QQQQ shorts at the best prices I can. I found a website that has the entire text available for free here. In chapter 7 there is a passage that is quite relevant to speculators in modern times:

  • States that rise unexpectedly, then, like all other things in nature which are born and grow rapidly, cannot have their foundations and relations with other states fixed in such a way that the first storm will not overthrow them; unless, as is said, those who unexpectedly become princes are men of so much ability that they know they have to be prepared at once to hold that which fortune has thrown into their laps, and that those foundations, which others have laid before they became princes, they must lay afterwards.

I'm no history buff, I don't have the memory for it. But I learned early on to seek out and emulate people with the skills and abilities I wished to acquire. This meant paying attention to both the successes and failures from each technique I could identify and put into use, so the experience that history provides is crucial. I never remember the history, just the lesson. Machiavelli wrote in chapter 6:

  • Let no one be surprised if, in speaking of entirely new principalities as I shall do, I adduce the highest examples both of prince and of state; because men, walking almost always in paths beaten by others, and following by imitation their deeds, are yet unable to keep entirely to the ways of others or attain to the power of those they imitate. A wise man ought always to follow the paths beaten by great men, and to imitate those who have been supreme, so that if his ability does not equal theirs, at least it will savour of it.

While The Prince is most known for its cold-blooded tactics, none of us today would have heard of it if it wasn't so self-conscious, strategically calculated, and full of critical insight. You don't need to have cold blood to be a prince in modern America (thank goodness), but you do need ambition, wits, and a little audacity; all of which The Prince delivers.


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